See also: Attachment A—Applications for International Airline Licences Guidance Notes

Introduction

This memorandum has been prepared by the Department to provide information on the role of the Department in the negotiation of international air services rights and entitlements and the licensing and designation requirements for Australian airline companies which intend to seek necessary approvals for the operation of international scheduled air services. It also provides information relevant to foreign airlines wishing to operate services to Australia.

Background

International air services are operated in one of two categories—either scheduled or non-scheduled (e.g. charter) services.

Scheduled international air services are operated within a legal framework pursuant to bilateral air services agreements (ASAs) between countries. These agreements are generally of treaty status and are enforceable in international law. An interconnecting web of over eight thousand ASAs is in place globally. Australia has agreements with more than sixty countries covering all continents.

Non-scheduled operations, including charters, are not usually covered by bilateral air services agreements and intending operators need to obtain the approval of aeronautical authorities in each country to be served. In the case of Australia, the regulatory arrangements for charter operation are set out in section 15 of the Air Navigation Act 1920. More information on and approval of charter operations can be obtained from the Department (see contact details below) at: http://www.infrastructure.gov.au/aviation/international/guidelines.aspx

Bilateral Air Service Negotiations and Policy Support and Regulation

The Department is responsible for negotiating and administering air services arrangements between Australia and other countries as well as the licensing of Australian and foreign international carriers. Both Australian and foreign carriers, once licensed, also require ongoing approval of their timetables (Air Navigation Regulation 20) in order to operate international services to or from Australia.

In preparing for bilateral negotiations, the Minister for Infrastructure and Regional Development provides a negotiating mandate intended to maximise the national interest, taking into account the views of stakeholders; including the tourism and aviation industries, State Governments, exporters and importers, airport operators and foreign policy interests.

The Allocation of Capacity to Australian Carriers

All capacity negotiated by the Department for Australian carriers is subject to allocation by the International Air Services Commission (IASC), an independent statutory authority. The IASC makes determinations on the allocation of scheduled international air route capacity to Australian carriers on public benefit grounds. Requests for information regarding the IASCs procedures and processes should be directed to the Executive Director, International Air Services Commission, GPO Box 630, CANBERRA ACT 2601, Telephone (02) 6267 1100, Facsimile (02) 6267 1111, alternatively information is available at: http://www.iasc.gov.au

The Department's responsibilities under the International Air Services Commission Act 1992

Section 49 of the International Air Services Commission Act 1992 requires an up to date register of all available capacity to be kept and made available for public inspection by the Department. The Register of Available Capacity contains information on the capacity available on particular routes, aircraft types permitted, and whether air service agreements and memoranda of understanding with other countries permit multiple or single designation.

The information contained in the Register is current at the date of entry. As the Department negotiates capacity increases, new route rights and provision for multiple designation or the Commission allocates capacity, the Register is updated to reflect these changes. Persons using information from the Register are advised that they should contact the Department to ensure that they have the latest information available.

Information available to applicants for Australian capacity

To assist applicants in developing their applications for available capacity, the Department has established a data room containing comprehensive up to date information in respect of Australia's bilateral rights and entitlements including information on:

points that can be served in Australia and overseas under each of Australia's air services agreements;

frequency limitations on individual city pair combinations;

traffic rights;

aircraft size limitations;

statistics and other data exchange requirements; and

capacity negotiation principles.

Confidentiality is attached to some of the documents in the data room associated with the bilateral negotiation process (generally at the request of Australias bilateral partner). Where relevant, the Department aims both to safeguard this confidentiality whilst ensuring that the fullest possible advice is available to applicants.

As a result, applicants or their agents will be required to sign a confidentiality undertaking before gaining access to the data room. This undertaking recognises that:

access to documents and information contained in the data room is for the purpose of developing an application for available capacity and/or developing an application when a determination or interim determination on capacity is subject to renewal;

certain documents and information held within the data room are confidential and;

applicants are to keep the contents of these documents and information provided confidential and to use such information only for developing applications to the Commission.

Following signature of a confidentiality undertaking applicants will be allowed access to the data room and will be permitted to obtain copies of documents relevant to their application.

Applicants who wish to access the data room are advised to contact the General Manager, Aviation Industry Policy on (02) 6274 7739 to arrange a suitable time. Officers of the Department will be available to provide advice.

Licensing of an international airline

Airlines (whether Australian or foreign) seeking to operate international scheduled services are required to apply for an International Airline Licence to the Department.

Subsection 12 (1) of the Air Navigation Act 1920 provides that an international airline shall not operate a scheduled international air service over, into or out of Australian territory except in accordance with an international airline licence issued by the Secretary in accordance with the Air Navigation Regulations. Subregulation 15 (2) of the Air Navigation Regulations provides that an applicant for an international airline licence shall furnish such information as the Secretary requires for a proper consideration of the application.

Guidance Notes have been prepared to assist prospective licensees in preparing an international airline licence application see Attachment A.

Applications should be forwarded to the Department 60 days before the date of commencement of the proposed operation. Assuming applicants provide all the necessary documentation, the Department expects to be able to process the application within the 60 day period. The applicant needs to ensure that the necessary Civil Aviation Safety Authority (CASA) clearances have also been obtained (see below).

Designation as an Australian international airline

An Australian carrier granted an allocation of capacity must be designated by Australia before it is able to operate international air services. Australian carriers seeking designation are required to demonstrate their capability to comply with the provisions of Australia's bilateral air services agreements including the requirement that they are substantially owned and effectively controlled by Australian nationals.

Intending Australian international carriers are required to meet a number of national interest criteria, including:

at least two-thirds of the Board members must be Australian citizens;

the Chairperson of the Board must be an Australian citizen;

the airline's head office must be in Australia;

the airline's operational base must be in Australia; and

no more than 49 percent of the total value of the issued share capital can be held by foreign persons.

Subsection 11 of the Air Navigation Act 1920 requires an Australian international airline to advise the extent, if any, of foreign airline shareholdings. The Government will require information on the shareholdings of any airline which holds or applies for Australian designation. The Government will withhold or withdraw designation from an airline should aggregate holdings by foreign persons exceed 49 percent.

The ownership and control rules for Qantas, as set out in the Qantas Sale Act 1992, will not change without further and separate public consideration.

Civil Aviation Safety Authority requirements

Operators seeking to commence scheduled international air services to and from Australia are also required to apply to the Civil Aviation Safety Authority (CASA) for an Air Operator's Certificate (AOC) together with a certificate in respect of Carriers Liability Insurance. CASA is responsible for all operational and safety approvals pertaining to civil aviation in Australia.

Requests for information regarding applications for AOCs, including an indication of the likely period required to process applications can be made at: international_ops@casa.gov.au. Applications should be directed to:

Advising foreign Governments of designation

The Department will arrange for the lodgement of a diplomatic note with the appropriate bilateral partner(s) designating a new airline.

Based on Australia's standard air services agreement, the bilateral partner is generally required to accept a designation with the least possible delay, provided that it is satisfied that the new airline is qualified to fulfil the conditions prescribed under the laws and regulations normally applied by its aeronautical authorities and that it satisfies the ownership and control provisions of the agreement.